How to Calculate Depreciation
Discussion
Ok,
how the heck can I work this out? Basically I'm uming and aring between various very different cars for my 90 mile commute every day.
I'm looking at various cars at vaious price ranges petrol vs durv etc. Thing is I trying to work out total cost of ownership over a couple of year maybe 3.
So can we take as an example a couple of cars and work out what they would be worth in 3 years? I don't have a clue how to really calculate this.. perhaps look at the equivalent older model and see how they depreciated?
couple of examples:
335d
350Z
thanks for any input
how the heck can I work this out? Basically I'm uming and aring between various very different cars for my 90 mile commute every day.
I'm looking at various cars at vaious price ranges petrol vs durv etc. Thing is I trying to work out total cost of ownership over a couple of year maybe 3.
So can we take as an example a couple of cars and work out what they would be worth in 3 years? I don't have a clue how to really calculate this.. perhaps look at the equivalent older model and see how they depreciated?
couple of examples:
335d
350Z
thanks for any input
Dave^ said:
only works on new cars - thanks though!bosshog said:
Dave^ said:
only works on new cars - thanks though!I guess after that, there are too many variables...
BOR said:
I assume 30% for the first year, then 10% each subsequent year as a broad rule-of-thumb.
Same here, that's why buying something at 12 months after the big drop always works out cheapest, as long as you can afford the initial price of course. Sometimes works out cheaper to finance the difference between a 4 year and 1 year old car as well if the newer version has warranty, sometimes for more efficient etc. etc.
Surely it depends if you are planning on owning it outright or accept that fact that to 'own' a nice car you will have to pay £xxx per month towards it.
FWIW I know BMW do PCP finance on used cars up to 3 years old. I had a quote for a 120d M-Sport for £2.5k deposit and £249 per month on a car that was £15k. In terms of a monthly payment/initial outlay that seems like decent value.
FWIW I know BMW do PCP finance on used cars up to 3 years old. I had a quote for a 120d M-Sport for £2.5k deposit and £249 per month on a car that was £15k. In terms of a monthly payment/initial outlay that seems like decent value.
Dave^ said:
bosshog said:
Dave^ said:
only works on new cars - thanks though!I guess after that, there are too many variables...
whoami said:
Dave^ said:
bosshog said:
Dave^ said:
only works on new cars - thanks though!I guess after that, there are too many variables...
mine thanks!I've always worked on the reducing balance basis not straight line and I always assume 23% loss per year
Example car bought for 10k after 1 year it will be worth 7.7k ie it retains 77% and year 2 it's value will be 77% of 7.7k and so on. If you buy a brand new car I'd add 17.5% on top of the 23% thereafter back to 23%
The rule of thumb of 50% is very good though.
Example car bought for 10k after 1 year it will be worth 7.7k ie it retains 77% and year 2 it's value will be 77% of 7.7k and so on. If you buy a brand new car I'd add 17.5% on top of the 23% thereafter back to 23%
The rule of thumb of 50% is very good though.
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